Heidrick & Struggles International, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Hydric and Struggles Q4 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance, you may press star 0. And without further ado, I would like to welcome your speaker for today, Ms. Suzanne Rosenberg. Ma'am, the floor is yours.

Good afternoon, everyone, and thank you for participating in Hydric & Struggle's 2020 Fourth Quarter Conference Call. Joining me on today's call is our President and CEO, Krishnan Rajagopalan, and Chief Financial Officer, Mark Harris. We have posted our fourth quarter slides on the IR homepage of our website at hydric.com, and we encourage you to view them for additional context, but we won't be referring to specific page numbers during our opening remarks. In our materials, we refer to non-GAAP financial measures that we believe provide additional insights into our underlying results. A reconciliation between GAAP and non-GAAP financial measures can be found in the release. Also, in our remarks, we will be making forward-looking statements and ask that you please refer to the Safe Harbor language contained in our news release. Krishnam, I'll now turn the call over to you.

Suzanne, thank you. Good afternoon, everyone, and thank you for taking the time to join our call. By all accounts, 2020 was an unprecedented year, and I couldn't be more proud of our team's ability to meet the moment, demonstrate resilience, and work collaboratively. It's often through challenging times that we prove what we're truly capable of, and I'm so proud of our Hydric team. Our ability to advise and work with clients in new and different ways has enabled us to more than hold our own in this market. We never stopped innovating. In some ways, the pandemic was an accelerant. We adapted our tools faster, we created virtual solutions, and introduced brand-new offerings. In addition to our quick actions and pivots, we were able to reduce our costs while remaining committed to driving our strategic investments in diversification, innovation, data, and tech enablement. Importantly, the transformation journey we embarked on several years ago positioned us very well as we entered the pandemic in early 2020. Prior investments in products and IT infrastructure, digitization of search side of our business, The build-out of hybrid consulting has led to higher value-added differentiated solutions for our clients and stickier relationships. Together, these factors enabled us to outperform the market last year and perform better than we have historically in different recessionary periods. We ended 2020 with a very strong balance sheet, no debt, and the strongest liquidity position in the firm's history. While near-term visibility remains more limited than normal, We began 2021 on our front foot, and we will emerge from this pandemic as an even stronger firm, generating enhanced revenue growth, profitability, and cash flow. Turning to today, the world is still in varying levels of lockdown, but there is a light at the end of the tunnel with new vaccines being introduced and rolled out. In 2021, we will continue to transform our business invest in new ideas, and broaden our capabilities and services with new technology and data-driven offerings. We are well positioned to take advantage of market opportunities and improving demand. In many ways, the pandemic has accelerated both demand and transformation, not only in how our clients' needs are evolving, but also in how our firm operates. Our clients are embracing the digital delivery of our services, and we're seeing increased demand across a wide range of areas, including healthcare and life sciences, industrial, and global technology services. Certainly, functional work across technology, risk, compliance, and finance remains strong as organizations continue to transform and reassess their business models accelerated by the pandemic. Diversity and inclusion, or D&I, and sustainability remain important focus areas across all industry practices in the US and globally. We also see continued demand for diverse talent technology and sustainability at the board level. In addition, an increasing number of clients are implementing our culture and inclusion solutions as they navigate the challenges of leading teams in a virtual environment. Our clients are also seeking our leadership assessment and development capabilities to better understand how to operate in a highly volatile and distributed working environment. Client feedback has been extremely positive. and our team around the world is energized in driving collaborative projects and large-scale engagements across search and consulting. We are bringing the full power of Hydric to our clients and effectively helping them accelerate their transformation using our integrated suite of offerings. A great example of this is with a global advertising firm that we started working with as a search client. We have since launched work with this client on inclusive leadership, and they're now expanding into culture work and culture change and helping build a future ready top team. This is the kind of deeper multifaceted journey we want to take with our clients. In addition to our client work, what also stands out is the ongoing transformation of our own business, as well as our resilience and the way we adapted our business in a rapidly changing market. First, we continue to deliver a premium experience to our clients. We seamlessly pivoted to virtual offerings and the way we advise our clients as evidenced by the convening of more than 3,000 leaders in virtual sessions since March of 2020. Despite the pandemic, we confirmed over 4,500 assignments in search, which is only 6% lower than the previous year and demonstrates our strong capability to deliver work virtually. We're leveraging our proprietary tools, including deployment of our Infinity Framework on more than 14,000 candidates and we're executing 100% of our engagements on Hydric Connect globally. Second, we've created and delivered new offerings. Last year, we launched our global D&I practice, which goes beyond just hiring diverse leaders, focusing on creating inclusive leaders, cultures, and organizations to help companies accelerate their business performance. We're uniquely positioned in the market as our dedicated practice brings our search capabilities, that help companies attract and hire diverse leaders together with our consulting experience to help organizations develop and retain diverse talent and create inclusive workplace cultures. Using our ABC methodology, we're gaining traction and helping our clients move the needle on D&I. Building diversity is a large part of many engagements. Today in the Americas, over 40% of our placements are diverse, and that number increases to approximately 60% at the board of director level. We continue to innovate in the future of leadership assessment with our proprietary tools, including our Agile Leader Potential tool, our CEO Success Profile tool, and our new Culture Signature Assessment tool, which provides expanded insights on culture impact. We have generated more than 100 pieces of thought leadership across search and hydric consulting, including written content, videos, and podcasts. And third, we've enhanced the way we operate. For example, firm-wide collaboration continues to improve such that approximately 50% of Hydric Consulting revenue now comes from search introductions. We've expanded our global strategic accounts program in executive search and Hydric Consulting. We're leveraging our IP to create significant opportunities that are helping us drive a robust new business pipeline, and grow our scale and target markets. With new data capabilities, including a new analytics warehouse, we are delivering enhanced dashboards and insights. And we're implementing new ways of working with the optimization of our global real estate footprint and the introduction of our flexible workspace philosophy. These are just some of the ways we are driving our performance and transformation. While near-term economic visibility remains limited, We are committed to capturing additional market share by going to market as one firm with an integrated value proposition. To that end, we have developed a clear executable strategy that allow us to propel our business forward in 2021 and beyond. More specifically, this involves broadening our capabilities and service offerings across search and consulting while moving into adjacent and complimentary areas with an increasingly tech different approach. We see technology as the underpinning for our expanded service offerings, allowing us to deliver our solutions in a more rapid, automated, and scalable way. Some of our new tech-enabled services and tools are already being embedded across our firm, and in the coming quarters, we plan to make additional investments in both our technology solutions and new service offerings. As we think about the strategic capabilities we're developing, our focus is on leveraging our premium brand and our trusted relations at the top of organizations we work with to deepen and broaden our client relationships, advise our clients on their most pressing executive-level issues and agendas, and partner with them on their current and future talent development needs going well beyond talent acquisition. To meet these objectives, we recently evolved our leadership structure for the future to address large-scale opportunities, including the transformation of our global go-to-market strategy and the augmentation of our technology capabilities. Through the lens of this new structure, we have onboarded the right talent to allow us to deliver on our three growth initiatives, which include, number one, growth scale and impact of both search and consulting, delivering a premium service experience and the Hydric way to clients. Number two, expand development of leadership solutions and capabilities, to address new and ongoing client imperatives. And number three, invest in new product development and strategic expansion into adjacent and complementary areas with innovative tech-driven offerings to drive future growth and shareholder value. In addition to driving these growth initiatives, our evolved leadership structure will further centralize our business operations to gain key efficiencies, drive synergies, and strengthen our people management capabilities. It will also enable us to drive consistency across our practices and business lines, further differentiate ourselves in the marketplace, deepen client relationships, and accelerate revenue growth as we provide our clients with a full suite of premium services and offerings. In summary, I again would like to express my appreciation to our team for their remarkable efforts during an extraordinary year for which no one had a playbook. While the near-term macro environment remains more uncertain than normal, we are excited about 2021 and the opportunities we have ahead of us to drive our performance and transformation. We will also continue to develop our people and our culture with a sharpened lens on diversity and inclusion and provide robust, meaningful opportunities to help all our colleagues to grow and thrive at the firm. Now, let me turn the call over to Mark to elaborate on the quarter.